Rental Sales Tax Laws in Arizona

Rental Sales Tax Laws in Arizona
Building with an "apartment for rent" sign.

Percentage

Renters and landlords should check with their local municipality to see the exact percentage to be paid. Some jurisdictions require that a commercial or business occupancy rental automatically pay the tax, while in others, a commercial or business rental may be exempt.

Landlords and Tenants

Whether the property is residential or commercial, the actual owner is responsible for paying the taxes due on the property -- not the occupant of the property. On all lease agreements, the tax amount should be clearly stated if it is a part of the lease agreement. For instance, if the rent is $1000 a month, and there is a 2 percent rental sales tax, the tax due would be $20 a month. So, the landlord could either charge the occupant $1020 for rent, or waive the fee.

Residential vs. Commercial Real Estate

Whether the property is a residential rental or commercial rental does not matter in terms of the percentage of the rental sales tax being levied. However, there are differences among Arizona jurisdictions regarding whether the tax needs to be paid, based on the type of property being rented. For instance, in some jurisdictions, a commercial real estate landlord may need to own three or more units to be required to pay the tax. In other jurisdictions, residential property owners may need to rent more than five units, such as in an apartment complex. Check with the local municipality or tax assessor's office regarding the laws in your jurisdiction.